Page 1 of 8

The views expressed in this report are those of Lesley Beath and may differ from Morningstar's views.

Reviewed this week

A mixture.

• Overview
  Approaching significant resistance. More...
• National Australia Bank (NAB)
  At resistance, but medium-term outlook is robust. More...
• Woodside Petroleum (WPL)
  A long-term Buy signal. More...
• Tap Oil (TAP)
  Strong action. More...
• ALE Property (LEP)
  Slow and steady. More...
• Paladin Energy (PDN)
  Is the worst over? More...
• Amcor (AMC)
  Daunting resistance. More...

Please note: before making an investment decision, Morningstar recommends you read the fundamental research available on these stocks.

Disclaimer: To the extent that any content in this report constitutes advice, it is general advice that has been prepared by Lesley Beath without taking into account the particular investment objectives, financial situation and particular needs of any individual investors. If necessary, you should consult with a licensed investment adviser or dealer in securities such as a stockbroker before making an investment decision. Opinions expressed herein are subject to change without notice and may differ or be contrary to the opinions or recommendations of Morningstar as a result of using different assumptions and criteria.

Overview

Last week was another week of solid gains. Resistance levels that were present in the US and Australia at the beginning of the week were overtaken, with barely a pause for reflection.

The US is now testing the February highs and the All Ords is only marginally below that level. The latter has rallied strongly since testing the support of the 200DMA on March 17; the index has gained 9% since that time. That date also saw significant lows in the US and in Europe, and it was on that day that the MSCI World index tested and bounced from the July 2010 uptrend.

This support was noted at the time, and expectations for a bounce highlighted. But the problem was, and still is, that the US market remains in an overbought condition; unlike other global markets it has not undergone a pullback to its 200DMA.

This has been a conflicting factor over the past month, and it is still causing some confusion. If we took that market out of the equation, then the outlook for global equities would be more robust.

I could be giving this undue attention, but as mentioned in previous weeks, it would be unusual for a pullback in the US to be ignored by Europe and Asia.

So it will be interesting to see if the US can push to new recovery highs this week.

The potential for such an event is still clouded, with the VIX holding above a strong support level, and with the ratio of US T-Bonds/S&P500 still above the February lows. This suggests that risk is still skewed to the downside, but a review of a large number of individual US stocks presents a less ominous picture. There are a lot of conflicting signals here, making it difficult to predict near-term action.

Elsewhere, Asian markets continue to exhibit a positive profile, and India is now trading above its 200DMA once again. Brazil and Chile remain under the influence of a medium-term Buy signal which was registered late last month.

On the home front, the All Ords gained 2.4% last week, propelled higher by the Materials (+3.4%) and the Banks (+2.5%). Healthcare was the standout, up almost 5%, with CSL ahead by 6%.